Co-op will only accept applications for its franchise programme from independent retailers with stores with a combined size of more than 2,800sq ft.
The multiple began accepting online applications for its franchise scheme last week.
The announcement outlined that stores must have a sales floor of at least 2,000 sq ft, a stock room of at least 800sq ft and £20,000 in weekly sales, not including services such as PayPoint or Camelot. No minimum investment was required, beyond the cost of the refit. According to statistics from the ACS, just 9% of UK independents have a shop floor of 2,000sq ft or above.
Any retailer who meets the sales and store size requirements can apply. However, Costcutter has exclusivity on recruiting retailers who want up to 10 franchised stores.
In return for converting to the Co-op fascia, the multiple has promised access to automatic stock replenishment, store-specific planograms, seven-day deliveries and 24-hour support. Other promised support includes tailored account management.
In the past, Co-op has submitted applications for the opening of stores smaller than the required size in its franchise programme, such as a planning application filed with Camden Council last year for a 1,625sq ft company-owned store in the borough.
Ketul Desai, of Nisa the General Store in Tufnell Park, north London, said: “The requirements are reasonable, but there’s not enough information to tell Nisa retailers if the switch is worth it.
“Will the profit margins be better? Will the branding in the store and outside be funded by Co-op or the retailer?”
Siva Thievanayagan, of Nisa Local Fletton in Peterborough, added: “It won’t work for me because I would want to make sure I would get the best margins. This won’t be possible as a Co-op franchisee.”
The Co-op claims the four stores that took part in the franchise’s initial trial increased sales by 50%.
Co-op’s head of new channels, Martin Rogers, said: “We can now deliver franchising at scale in new places to attract new customers and members.”
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